Suggestion Box 2.0: Is MyStarbucksIdea a Blueprint for Banks?

image One perk of working for a large company is being recognized, or winning prizes, for contributing useful suggestions. While employees can be pretty cynical about the whole process, overall, it’s good for employee relations to solicit and reward suggestions. Employees appreciate the opportunity to voice their ideas to senior management and do their part in making the company/products better. And if they win a free dinner, it’s all that much better. 

The same concept can work even better with customers where you don’t have to worry about favoritism and corporate politics. But how do you solicit meaningful suggestions without getting bogged down in an expensive and time-consuming evaluation process? And more important, how do you prevent the really innovative ides from getting killed in the marketing/customer service/IT department, where the not-invented-here bias rules?

Interactive suggestion box from Starbucks
Amidst a sweeping round of innovations announced at its annual shareholders meeting today (see note 1; press release here), Starbucks provided a glimpse of the future of customer feedback with its MyStarbucksIdea, a user-generated discussion forum revolving around product and service suggestions (see screenshot below).

By involving users every step of the way, the system helps remove the inherent bias that plagues most company-run programs. The key is allowing registered users the power to vote on each idea, the best rise DIGG-like to the top, where other customers, along with the Starbucks top-brass, are likely to see them. Other than light moderating of the forum, Starbucks only has to process the very best ideas.

To provide the all-important company feedback to the community, the Starbucks site (note 2) has an area that will showcase the ideas that are actually implemented. The site says there are no monetary rewards, but I would expect that wining ideas will receive some small token of the company’s appreciation such as a $50 Starbucks card or t-shirt. You don’t want the incentives to be too high, or the system will be gamed and its appeal damaged. 

The most popular idea at Starbucks has to do with providing discounts…no surprise there. But the company has wisely introduced a dozen idea categories to help spur discussion in other areas. For instance, in “Other Product” section (second screenshot below), I found two that I voted for: microwave ovens to re-heat coffee and providing small stickers to keep the coffee from sloshing out the drinking hole while driving.

Implications for financial institutions
I believe that every financial institutions should have some type of suggestion program even if it’s just an email address (suggestions@yourbank.com). And I think the open Starbucks approach could work very well. However, if there are no ground rules, most banks and credit unions will be innundated with “ideas” to lower fees, raise savings rates, and so on. As much as you don’t want to stifle discussion, you may have to restrict or even forbid suggestions about pricing. Most people will understand that your pricing decisions are not made via the consensus of a public user forum no matter how many votes “interest-free loans” receive. 

To help spur ideas outside the usual complaints, create a list of categories such as online banking, wire transfers, checking accounts, branches, and so on to generate ideas for your different product lines.

MyStarbucksIdea homepage (19 March 2008)

Starbucks mystarbucks idea homepage

Top ideas in “Other Products” category

top ideas in "other products" category

Notes:

1. Starbucks also announced a set of rewards for users of its prepaid card including free premium drink upgrades such as soy milk, free beverages with the purchase of coffee beans, and the big one for the WiFi set, 2 hours of free Internet access with a purchase.

2. Interestingly, Starbucks new app is built on the Force.com platform from SalesForce.com.

ING Launches Retirement Calculator: INGyournumber.com

image Last week, ING Group's U.S. unit (note 1) made a splash with two major promotional efforts:

  • Sponsored free access to the Wall St Journal online for an entire day (see screenshot below).
  • Launched a TV advertising campaign, INGyournumber.com, aimed at the retirement market (press release here, view the spots here). Update 18 March: The company ran a full-page ad for the program in today's Wall Street Journal (p. A7)

INGyournumber <ingyournumber.com> is remarkably similar to Wells Fargo's Retire Secure Index that we looked at last week (here). The financial services giant created a special site with a Flash-based tool designed to help you find your "number." That is, the total amount you need to save to provide your desired level of retirement income.

Financial institutions should draft behind these well-funded efforts, and make sure your retirement tools are prominently positioned within your website.

ING Took Over The Wall Street Journal Online last Thursday (13 March)

ing_wsj_sponsor

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INGyournumber.com Microsite

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Note:

1. These promotional efforts from the main ING group, not ING Direct; although the direct banking arm did receive a small link on the bottom of the screen.

BarCampBank Season Opens March 29

image Looking for a low-cost way to generate new ideas and meet like-minded financial geeks? You have three opportunities during the next four weeks:

As of today, there are 34 people signed up for San Francisco, a dozen for New England, and 24 for NYC. Cost is minimal, max of $25. Register in advance on the respective websites.

Facebook Financial & Banking Apps Have Only 263 Daily Users

image It's been a while since we looked at the actual usage of payment, personal finance, lending, and banking apps on Facebook (previous coverage here; see note 1). And assuming the numbers provided by Facebook are accurate, it's not good news. 

Overall, the banking and personal finance apps have anemic usage levels totaling just 263 daily users (for apps with more than 1 daily user). That does not include virtual currencies or stock tracking/investing applications (see note 2). In comparison, the most popular general Facebook app, FunWall, has more than 3 million daily users.

But the number will grow rapidly if major financial institutions add balance inquiry functionality such as (#4) MyMoney from Fiserv's Galaxy unit (previous coverage here) and mShift's Key Point Credit Union app discussed here (only 1 daily user, so it did not make our table).  Activity in Facebook personal finance apps yesterday (13 March 2008):

Name (parent) Daily Users
1. PayPal (eBay) 80
2. Billmonk (Obopay) 55
3. LendingClub* 26
4. MyMoney (Fiserv) 17
5. PayMe 14
6. Debt Manager 10
7. Prosper 7
8. FriendFunds 7
9. UPside Visa Card Balance Reader 6
10. Web Money 6
11. Buxfer 5
12. IOU (Sanjay Madan) 5
13. Split It (TD Bank) 4
14. MoneyExchange (Revolution Money) 4
15. IOU (Jonas Neubert) 3
16. Mortgage Calculator 3
17. BillTrack 3
18. Insurance Marketplace 2
19. Wesabe 2
20. FB E-Wallet 2
21. Intuit Tax Tips 2
TOTAL 263**

*See comment 1

**Does not include apps with less than 2 users

Notes:

1. You cannot make a meaningful comparison with last summer's activity because Facebook changed the way it reports usage. Previously, the company reported the number of application downloads and now it shows the much, much smaller "active daily user" total. For example, in July 2007, LendingClub had already had more than 11,000 downloads. Under the new measurement system it tallies just 26 daily users which puts it in third place (see table below).

2. The leading stock tracking app, Fantasy Stock Exchange, has 7,990 daily users. The most popular virtual currency AceBucks has 11,300 daily users.

Playing the Environmental Card with Remote Deposit Capture: Green Calculator from BankServ

imageWhile you don't want to overdo it and look like a hypocrite (see note 1), there's nothing like a little green to spruce up your marketing this time of year. BankServ lets users see just how much they can save by uploading checks to the bank over the Net instead of hightailing over to the branch in their Hummer (note 2).

In my case, I'm only going to save a half barrel of oil per year by forgoing those branch visits. Less, if it ever stops raining and I can get back to biking to the branch. It sounds more impressive in terms of CO2 emissions saved: 200 pounds.

It's a nice tool. Financial institutions could also use similar calculators to show the green benefits of paying bills online, receiving electronic statements, or anything else that cuts down on waste.

Note the URL: http://www.bankserv.com/greenbanking/

BankServ fuel saving CO2 calcultor

Note:

1. The term is new to me, but my friends over at Javelin Strategy blogged about greenwashing this week. In short, it means misleading consumers about the extent of your eco-friendly practices.

IP Commerce, SmartyPig, TradeKing, and VaultStreet Added to FINOVATE Startup

image The latest financial services startups to sign on for a demo slot include: IP Commerce, SmartyPig, TradeKing and VaultStreet. They will demonstrate their latest product features April 29 at our FINOVATE Startup conference in San Francisco (previous coverage here). 

This brings the total number of presenting companies to 37 (see note 1).  It's going to be one jam-packed, action-filled day. And there is still time to save $100 during our March Madness/Daylight Savings Time/St. Paddy's Day/Saving o' the Green special. Register here before it's too late.

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Note:

1. Forty companies is the maximum capacity.

Person-to-Business Lending: A Wake-Up Call for Small Business Lenders?

image Talk about turning the tables. Now individuals are lending to businesses. Has the credit crunch gotten to that level?

Small business lending, or the lack thereof, was highlighted in today’s Wall Street Journal in a column by Jane Kim that ran on the front page of the Personal Journal section, Where Either a Borrower or Lender Can Be: Small-Business Owners Turn to Online Networks for Funds as Banks Tighten Credit (here).

The article includes three examples of small business owners, frustrated with the stinginess of bank lending departments, that turned to person-to-person exchanges for loans. Apparently, all three had excellent credit since Mr. Walsh was able to borrow $22,500 at 10.25% and Mr. Kelley $18,500 at 10.97%, both from Prosper. And Mr. Kalempa received $15,000 from LendingClub for 9.6%. You don't get funded for loans of that size unless your credit is good and your story even better.

Small business owners may not have time to shop for credit, but they do network. And given how unique positive borrowing experience are, these P2P success stories will be told and re-told dozens of times. The credit-crunch induced conservatism of the banking community, especially towards growing businesses, could be an HUGE opportunity for the new P2P marketplaces.

It could be the crossing-the-chasm market niche that the loan exchanges need in order to gain traction and profitability as they position themselves for the mainstream consumer marketplace. The credit markets are huge and complicated and it's impossible to predict how this plays out. But if I worked in small business banking product management, I'd circulate this story to senior management and start working on my response to the P2P lending threat. 

Wells Fargo Supports "Retire Secure" Radio Buy with Search Engine Marketing

image I don't know if Wells Fargo has saturated the entire Seattle market, or just the radio station I listen to, but I've heard its ad for a web-based retirement tool a dozen times in the past week or so.

I like the radio spot. It takes a complicated subject and creates interest by asking, "What is your RSI score?" Then, sending listeners to the Web to take the bank's Retire Secure Index test. It's interactive, it's timely and it makes good use of a multi-media approach. 

And Wells Fargo uses search engine marketing masterfully to ensure that interested prospects find their way to the bank's retirement landing page. The bank has purchased Google AdWords for various retirement terms (see first screenshot below) and created a unique landing page (second screenshot) and URL <wellsfargo.retiresecureindex.com> that has quickly moved to the top of the organic search results (see note 1).

Retirement tool
The tool itself is good. It's not easy to make a retirement savings worksheet compelling, but the bank does about as good a job as you can expect. After a 60-second intro by the friendly virtual spokeswomen (see second screenshot), the user completes a short form that takes about two minutes. The on-screen spokesperson talks you through it, but I tuned her out since it's relatively straightforward stuff (note 2). 

After a few seconds of calculation, and a clever drum roll, Wells delivers an RSI number (see third screenshot), which is the number of years you can maintain your desired income level after retiring. It's a good way to present the results, focusing on the positive. Users can go back and change the inputs or go into advanced mode to add home equity, business equity and/or part-time employment.

At the end, users are encouraged to contact the bank through a branch or toll-free telephone number to talk to an investment rep. There is also a link to open an IRA online. All in all, it's a good effort to engage users with a difficult topic.

Overall scores:

  • Radio advertising: A+
  • Search engine marketing: A
  • Retirement tool: B+
    Provide an option to continue without the virtual spokesperson (see note 3)

1. Google results for "wells fargo retire secure" (10 March 2008, noon)

Google results for "Wells Fargo retire secure"

 2. Wells Fargo Retire Secure Index Landing page

Wells Fargo Retire Secure index landing page

3. Call to action

Wells Fargo RSI score and call to action

Notes:
1. For more information on search engine marketing for financial institutions, see our latest Online Banking Report (here). 

2. The audio can be turned off, but the spokesperson cannot be made to sit down or go away (see note 3).

3. The first option on the original landing page is to choose "dial-up" or "high speed" versions of the tool. The dial-up version does away with the audio/video track and just presents the static form.

New Issue of Online Banking Report Published Today

obr_cover_oct07We just finished the latest from our Online Banking Report, entitled Searching for Customers 3.0 (see note 1). The report takes a fresh look at search engine marketing for financial institutions including local search, financial keyword selection, how to leverage social media such as blogs to improve your organic results, and more.

It’s 36 pages long with 11,000 words and 28 tables. The report includes overall search marketing trends and metrics. We also dive deep into the most popular financial search terms and to help you uncover new ideas for your own search marketing tactics.

Online Banking Report subscribers may download the report here. All other may purchase it for US$245 (single user) here. The abstract is available here.

Note:

1. The “3.0” in the report title means it’s the third time we’ve covered this subject during the 13-year history of Online Banking Report. We also looked at search in April 2003 (OBR 95) and June 2001 (OBR 69) when Google AdWords was just getting rolling.

50 Banks and Credit Unions Have Facebook Pages

imageFour months ago (here) I wrote about how easy it was to set up a company page in Facebook. Even a total novice like myself could create one in a few minutes.

There hasn't exactly been a rush to do it, but approximately 50 financial institutions have posted a free company page on Facebook (see note 1). Although, most are simple "white page" listings with no more than logo, address, phone number and URL, it's still better than nothing.
(Update Mar 7: Please note, I am talking only about Facebook "pages" here. There are several banking "groups," notably Chase +1 with nearly 50,000 members, that are far more active. Also, some FI pages , such as TD Money Lounge and RBC Bankbook, do not show up in my search using "bank" and "credit union." Consider these counts approximations. )

Credit unions have three times as many as banks. Credit union's can often move faster because of their size and culture. Here's the count by financial institution type:

  • 10 North American banks
  • 32 North American credit unions
  • 8 banks outside North America

The only banks with more than a handful of fans are Jordan's Arab Bank with 145 and HSBC Bank Egypt with 89. Silicon Valley's Valley Credit Union (screenshot below) leads in the U.S. with 45 fans.

Valley Credit Union Facebook page

There's also one bank branch that's taken the initiative to post a Facebook page. U.S. Bank's Beaver Valley, Ohio branch (here) is one of the few to have posted something interesting, a $100 Super Bowl contest. They've also posted their branch hours (see screenshot below). 

US Bank's Beaver Valley branch Facebook page

Note:

1. I counted financial institution pages by using Facebook's site search for "bank" and then for "credit union." To qualify the FI had to at least post the bank's logo and URL. There were also a few placeholder pages with no logo.

2. For more information on social media and online personal finance, see our Online Banking Report #144/145.

Online Financial Services Scorecard: January 2008

Compete monthly online finance application and sales statistics

Summary
According to data from Compete's consumer panel, the deposit and home loan categories experienced significant increases in both shoppers and applicants during January (with the exception of home equity). Credit cards took a big hit as both shoppers and applicants dropped by double digits. Conversion across the board stayed relatively constant across the three segments, with credit cards moving the most with a drop of 3%.

Commentary

  • The credit card segment experienced a decline in the new year as both shoppers and applicants dropped significantly at several large issuers. All but one of the major issuers being tracked experienced downturns.
  • Mortgage refinance continued its upward trend from last month with a 16% jump in shoppers and 57% increase in leads/applications. The pushed the conversion rate up 2%.
  • Purchase mortgages performed the best out of the home loans segment as more than half of the providers received at least 30% more applications during the month of January.
  • Even though home equity jumped significantly in terms of shoppers to their sites, there was still a 7% drop in leads/applications. Home equity had a similar trend last month when leads dropped 6%. Even though home equity lenders were seeing getting their shopping traffic back, they were not successful in converting them to applications in January.
  • Deposits saw the most growth of the three segments as it grew in shoppers and applicants across all three categories. Three major checking providers turned in 50% growth in both shoppers and applicants. Only one financial institution tracked showed a significant increase in conversion. This created an increase in conversion for the market of +1% with a similar growth rate in both shoppers and prospects.
  • Savings performed even better than checking as all but two companies saw a significant jump in applications as well as shoppers. Because of the increases, conversion stayed stagnant at 6%.
  • High-yield savings followed the same path as the entire competitive set saw double-digit increases in shoppers, and only one had a decrease in applications.

About the Financial Services Scorecard
In April, we introduced the Financial Services Monthly Performance scorecard produced by Compete. It summarizes the overall performance of 23 large U.S. financial institutions and lead-generation sites. Refer here for the detailed methodology as well as companies tracked.

SimpleTuition, SocialPicks, Tyfone, and Zecco Added to FINOVATE Startup Lineup

imageThe demo lineup at our upcoming FINOVATE Startup conference just keeps getting better. With the additions of SocialPicks, SimpleTuition, Zecco, and Tyfone we now have a total of 34 presenting companies on board. We have a few more cool startups vying for the last couple spots, which we'll announce next week.

The full lineup for the April 29th event is maintained at our website (here). If you want to be in the audience and have a chance to see and interact with these companies, please register here

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